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Car Inventory Management – Everything You Should Know

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Car Inventory Management

Table of Contents

5 Min Read

The out-of-stock situation creates disappointment in customers and losses in sales. To avoid this, dealerships require inventory management. A business needs inventory management software to keep track of the inventory from suppliers to different warehouses and customers. Without it, the inventory would either be or there would be a lack of the same.

Knowing the right quantity and when to order is key. Inventory management is important for any business and goes beyond holding and selling stock. Car dealerships that still do inventory checks manually cause inefficiency in inventory management processes. This is why having software that does this job automatically is essential. The COVID-19 pandemic has forced retailers and dealerships to replace manual inventory management with car inventory management software, ensuring adequate supply chain steps. This software also ensures you have sufficient stock by reminding you of a shortage.


What is Car Inventory Management?

Car dealerships have to tackle demand and supply. More inventory can prevent products from becoming old and obsolete. This can mean a waste of a resource that can be used elsewhere in the business. On the other hand, insufficient inventory can lead to customer dissatisfaction because of unavailable resources. This is where car inventory management comes in, keeping track of the cars being sold. It helps deal with stocks and dealership management software because products tend to become old and obsolete.

This ensures visibility across all channels and ensures the right items are available at the right time. This ensures product availability across the entire supply chain and that it runs efficiently.

A car inventory management system for dealerships allows you to organize your vehicles, find essential details about your used vehicles within seconds, and merchandise your lot online. While customers used to visit dealerships to look at cars, most of that process has become entirely digital.


Benefits of Automotive Inventory Management

If you are wondering why inventory management is important in the automobile industry, let’s understand its benefits to find the answer.

Improve customer experience

If you have an inventory management system in place and have details about the products, your customers will be satisfied. Customer experience is everything, and whether you want to admit it or not, customer experience is everything. If they are happy, this will leave a lasting impression on them for future services and products. This will develop loyalty and trust in them and help generate more sales. Used car dealer management software helps improve buyers’ experiences in all aspects. If you have the right inventory, you can ensure that the vehicles have all the details and prepare the customers for test drives.

Improve staff experience

Proper inventory management will also help your sales team keep track of all the vehicles in your lot, as well as the ones that are bound to arrive or leave soon. The better your management process, the smoother your dealership will function.


Benefits of Automobile Inventory Management Software for Automotive Supply Chains

Organizing vehicles, finding their details, and merchandising your lot online are some of the benefits for car dealership supply chains.


Inventory Management for Supply Chains


Let’s look at some more advantages below:

1. It makes it possible to plan demands

Consumer demands should be met immediately; otherwise, you risk losing business. Excess or insufficient inventory will result in huge losses for your business. As a Car Dealership, you can offer discounts to your customers to clear the remaining vehicles on your lot or communicate the waiting period until new stock arrives. Inventory management systems help track your inventory in real-time, such as location and status, to meet demand at the right time accurately.

2. Managing suppliers

Suppliers generally rely on multiple vendors to fulfill an order. This way, when one vendor doesn’t have a product, it can be fulfilled through another vendor, ensuring availability and meeting demand.

An auto dealer inventory management system keeps track of these orders, and which vehicle or vehicle accessories came from which supplier. This ensures that there is no waste and ensures a reduction in costs. It will allow you to keep the quality of your products in check and gain the trust of your customers.

Inventory management also ensures that materials are available, machines are operational, and employees’ work is scheduled. Material availability will ensure accuracy when a product goes into production. If materials are in short supply, the management system will keep track of them and enable employees to run them efficiently based on availability.

3. Pricing

Pricing is an important aspect of a car dealership that should be addressed. Ensuring accurate pricing for a car will ensure not only an increase in profits but also reliability.

Dealership inventory management provides data so you can price your cars competitively according to the market. Make it easy for Google, too, so that when customers enter a search query relevant to your business, they will be taken to your website.

4. Management of warehouse

Effective inventory management ensures visibility across all locations, such as having enough stock in each warehouse location. Car inventory software makes the supply chain run efficiently at every step, from the suppliers to the customers. This helps to see inventory levels across every location, make decisions, and optimize the business accordingly, reducing costs and delivering on time.

5. Order fulfillment

Delivering orders and products on time is crucial; hence car inventory management apps or systems are required. This is why visibility into inventory is necessary because it can lead to less obsolete inventory and satisfied customers.

It provides visibility for item availability across all channels and locations. If there is a requirement, the order can be fulfilled at the closest warehouse by completing customer orders.

Effective vehicle inventory software can quickly address customer issues, such as order status, returns, and exchanges. It will give your staff the information they need in terms of stock to solve these issues productively.


Benefits of Automobile Inventory Management Software for Used Car Dealerships

Inventory management systems allow you to spend more time making sales, instead of focusing on data, customer management, and inventory. Some other advantages are listed below.

1. It saves time and helps you organize

As a business, you can keep all the information about your inventory, such as the make, model, and year. It will also provide you with vehicle information with a click of a button.

This makes it easier to collect information when a customer searches for a specific used car.

2. Target specific customers

Customers looking for a specific model, make, price or mileage can easily find what they are looking for. Used Car Dealerships can leverage this to drive traffic to their website by using an inventory management system.


Impact of Inventory Management on the Automotive Industry

Inventory is more than just knowing about your vehicle information; the inventory should also be based on the market demographic. Some cars sell better in some areas, and an inventory management system will align sales with your customers’ needs.


Car Inventory Management


There is also growth in digitization as more and more brands, and customers are beginning to adopt it. They want to view, compare, and get information about the cars they want to buy online. This means taking an online sales approach to make it easier to fulfill orders. Nearly 70 percent of dealerships in the US switched their sales processes online. Where 75% of dealerships agreed they would only survive if the process were digitized. More recent facts show that 48% of 17- to 24-year-olds are ready to buy a car the first time they search for one.

The pandemic also impacted the automotive industry, but the used car industry continues to boom. The US automobile market is valued at 41 million dollars and is expanding. This is why inventory management is necessary for greater visibility which will increase profits.


Features of Car Inventory Management System

Here are some of the features of a good new and used car inventory management systems:

A cloud-based management system ensures that inventory management tools can be launched quickly rather than taking weeks to implement. The system should be reliable with less downtime, accessible, secure, and constantly improving.

Finances are important because they will inform your customers and assist them in making informed decisions if they are aware of them. A great in-house financing option (the company provides loans to its customers) is excellent, too, so that customers do not turn to third-party lenders.

Inventory Management: Inventory management tools are necessary to know how much and what stock you have. Excellent software will manage this as well.

Customer Management: Keeping track of customers and their histories is essential to your business. Contact information for retailers and lenders is also provided. Good software will have customer relationship management software built in rather than having to buy it separately.

Analytics: Understand how your dealership is performing with good software. Such metrics will help in the future.


Auto Dealer Software with Inventory Management

As mentioned previously, customers are spending more time online before going to the traditional way of buying cars. It is, however, easier to attract their attention if they know their desired car exists in your inventory.


Auto Dealer Software Inventory Management


Here are some of the best software for car dealer inventory management:

1. CDK Drive

CDK Drive is designed to help manage dealerships, inventory, sales, and leasing. It also allows car dealerships to track orders, shipping manifests, and performance and look for new business opportunities.

2. DealerTrack DMS

It is software that streamlines operations. It features a contact database, document management, lease tracking, and website integration.

3. VinSolutions

The software enables dealerships to promote inventory to make it more convenient for customers. It also protects from theft, lot management, and Car CRM integrations.


Car Dealer Inventory Management Best Practices

To get the most benefit from your vehicle inventory management system, here are some best practices you can follow:


1. Know your vehicle’s market

If you are a car dealership, you need to understand whether the car will be sold. If there is no demand, it will be a waste to keep it in inventory. You will need to understand customer behavior by researching and gaining insight into what customers like or dislike. Vehicles that are in demand can be found by doing keyword research online and optimizing inventory accordingly. This will lead to modifying vehicle descriptions, which will result in cars being sold faster.

2. Create your inventory of cars

Invest energy in maintaining your database of vehicles; this will lead to better availability of details for your customers. It is also important to include every detail, document, and vehicle information on your website. This will allow the car owner to look for a solution on your website when they face issues.

3. Evolve and adapt

Car dealerships must evolve and adapt to market changes. It particularly applies to pricing because less desirable cars must be sold fast, so they don’t take up space on your lot or in your inventory. It is wise to sell a car at an affordable and favorable price.

This is also about understanding your market and what customers are willing to pay. A quick search of other car dealerships’ inventory management systems will help.

4. Improve the vehicle description page

Ensure that the description pages match the Vehicle Identification Number (VIN). Visuals are important because they are what a customer sees first. AI-powered Car Photography platforms, like Spyne, can help you out here. Other than that, include all the features and specifications of the car in the description, which should include model information, equipment, and price.


Vehicle Inventory Management that Helps Your Customers

Customer dissatisfaction ruins reputations. Effective car inventory management will keep track of your inventory and protect your product and the company’s reputation.

When companies run their inventory efficiently and quickly fulfill customer orders, it increases customer satisfaction and loyalty. Moreover, it helps in creating a positive brand image, leading to more profits as customers rely on you more.


Spyne Auto Console



Investing in a great inventory management system will drive sales, results, and traffic to your website. Great vehicle inventory management software does the work of managing inventory and delivering it automatically. This reduces manual labor and costs and helps retain customers by building trust.

Furthermore, as a car dealership, you should diversify your inventory by car make, model, and mileage. This will ensure the customers can compare and find what fits them the best.



  • Q. What different types of inventory systems do a car dealership use?

    Car dealer inventory management systems, also called dealership management systems (DMS), handle all automobile operations. This includes cost calculation, financing, and managing inventory. It also includes information tracking, preparation, storage, auto repairs, and payments.

    An inventory system is essential for used car management to track the vehicle’s history from its initial date of purchase. A management system should also include details of the value and condition of a car, its services, and its history so that every crucial detail is noticed.

  • Q. What are the duties of a used car manager?

    The duties of a used car manager include managing automotive inventory, sales, marketing, and the price of cars. As a car manager, ensuring the quality of used cars being purchased from a retailer. As a manager, the duties also include planning, organizing, leading, controlling, and staffing.

  • Q. What is the best inventory management software to choose from?

    There is no best vehicle inventory management system, but each software serves different requirements. Software solutions such as CDK Drive, VinSolutions Connect CRM, Dealertrack DMS, and Dabadu XRM are good options. You can choose what fits your company’s needs and the customers’ needs the best.

  • Q. Why is inventory management important for marketing used vehicles?

    Here are 5 reasons why you should be using inventory management for marketing your used vehicles online:

    • Save time.
    • Organize your online inventory.
    • SEO improvement.
    • Target specific audience.
    • Make use of dynamic ads for your inventory.

Written by

Team Spyne

Young, enthusiastic, and curious are the three words that describe Spyne’s content team perfectly. We take pride in our work - doing extensive research, engaging with industry experts, burning the midnight oil, etc. Every word we write is aimed at solving our readers’ problems.

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